Moody downgrades McClatchy ratings

SAN FRANCISCO (MarketWatch) -- Moody's Investors Service on Wednesday downgraded McClatchy Co.'s corporate family and probability of default ratings to B2 from Ba3 and its senior unsecured notes to Caa1 from B1. "The downgrade reflects our expectation that ongoing significant declines in advertising revenue will continue to pressure EBITDA -- leading to an increase in leverage and heightened risk of a credit facility covenant violation," said Moody's. The move follows the company's announcement that it will lay off about 1,150 employees, equivalent to 10% of its total workforce, in an effort to reduce costs.